Nick Xenophon (SA, Independent) Share this | Hansard source

I am grateful to Senator Marshall for giving me some time to speak on this very important issue. This is a motion that I have instigated along with my fellow senators, senators Griff and Skye Kakoschke-Moore, as well as Senator Rhiannon from the Australian Greens co-sponsoring this motion. To paraphrase Oscar Wilde, our current procurement rules seem to know the price of everything but the value of nothing, because we have a situation in this country where we have lost our way when it comes to our procurement rules. The effect on our economy and social fabric is fundamental.

We have a situation where the Commonwealth government spends $59 billion a year—and the state governments, between them, would spend tens of billions of dollars more each year—on procuring goods and services, but our rules are broken. Our rules are broken at a state level; the New South Wales government decided to spend $2.3 billion on rail cars from South Korea and it decided to spend millions of dollars for 100 kilometres of steel rail lines from a Spanish company at the very time that Arrium, the steelworks in Whyalla, is struggling for survival. That decision by the New South Wales government was a disgrace. I mention it, notwithstanding the terms of this motion, because the federal government funds so many of these infrastructure projects. It is about time the federal government tied those grants, those infrastructure funds, to a requirement for a robust and fair procurement policy.

We have a crisis of manufacturing in this country. Over the last 10 years, we have slid dramatically from 12 per cent of our GDP being based on manufacturing to just 6.2 per cent. We are just bumping along with Botswana at six per cent and Rwanda at five per cent. I have nothing against Botswana and Rwanda, but I mention them because, unlike Australia, they have never had a strong and firm industrial base. We have a situation in this country where, as Senator Rhiannon alluded to, over 120,000 jobs—in fact, some economists say it is more like 150,000 jobs—have been lost in manufacturing since the GFC. We know that we are facing a cliff. We are at the precipice.

At the end of 2017, the motor vehicle manufacturing sector in this country will shut down. Once it shuts down, something like 200,000 jobs are at risk—not according to me, but according to the Bracks review for the Victorian government several years ago and a more recent review by Professor John Spoehr of the University of Adelaide. That 200,000 figure indicates that, of the 45,000 direct jobs in automotive manufacturing and in the supply chain, there is a multiplier effect. In the UK they say it could be four or five. Taking a conservative multiplier of three or four, you are looking at a risk to 200,000 jobs in the economy. There will be a spike in unemployment, particularly in Victoria and South Australia, where automotive manufacturing is based.

There does not seem to be a plan from the government to deal with that. There is an underspending in the Automotive Transformation Scheme of $750 million. We need to divert some of those funds—which will not be spent because the scheme is effectively being shut down—to allow companies to be able to make other things and diversify into the global automotive supply chain or into other forms of manufacturing, just as Precision Components does in Adelaide, making heliostats for renewable energy.

But in respect of the whole issue of procurement, we can tackle those job losses—that cliff we are facing. We can tackle extraordinarily high unemployment rates. The unemployment figures came out today and, as I understand it, they have gone up for South Australia, which still has one of the highest rates in the country.